Michelle Horlor v The Symon Trust T/A Kensington Park Medical Practice

[2016] FWC 3057

[2016] FWC 3057

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Michelle Horlor
v
The Symon Trust T/A Kensington Park Medical Practice
(U2015/16207)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 18 MAY 2016

Application for relief from unfair dismissal - redundancy situation - incomplete consultation - limited compensation.

[1] Ms Horlor lodged an unfair dismissal application on 24 November 2015. In that application she asserted that the termination of her employment with The Symon Trust T/A Kensington Park Medical Practice (Kensington Park Medical Practice) on 6 November 2015, was unfair. Kensington Park Medical Practice objected to the application on the basis that it asserted that it was a small business and Ms Horlor had not completed the requisite minimum employment period. Further, Kensington Park Medical Practice asserted that the Small Business Fair Dismissal Code had application and was applied to the termination of Ms Horlor’s employment. Lastly, Kensington Park Medical Practice asserted that the termination of Ms Horlor’s employment met the definition of a genuine redundancy such that it could not be unfair.

[2] These asserted jurisdictional impediments to Ms Horlor’s application were addressed in a hearing in March 2016 and were determined in a decision 1 I issued on 21 March 2016. In that decision I concluded that Kensington Park Medical Practice could not properly be described as a small business and that Ms Horlor had completed the necessary minimum employment period. Because I concluded that Kensington Park Medical Practice was not a small business at the time of the termination of Ms Horlor’s employment, the Small Business Fair Dismissal Code did not have application. Lastly, I determined that I was not satisfied that the full requirements of a genuine redundancy, set out in s.389 of the Fair Work Act 2009 (the FW Act) were met. Specifically, I was not satisfied that the requirement set out in the Nurses Award 2010 for written advice to be provided to Ms Horlor to confirm, amongst other things, the nature of the proposed change that could result in her being made redundant, was complied with. Accordingly, the Kensington Park Medical Practice jurisdictional objections to the application were dismissed. I note that, having reached this conclusion I referred the parties to the Full Bench decision in UES (Int’l) Pty Ltd v Leevan Harvey2 on the basis that it could provide some practical guidance on the options available to the parties.

[3] Ms Horlor’s application was not settled through the conciliation process. Accordingly, it was the subject of a determinative conference, on the merits, on 17 May 2016. At this conference Ms Horlor represented herself and Kensington Park Medical Practice was represented by Dr Symon.

[4] I have summarised the background to the application in the following terms. Ms Horlor worked for Kensington Park Medical Practice from 17 February 2015, until the termination of her employment on 6 November 2015. She was engaged as a practice nurse under the terms of an employment contract dated 16 February 2015. There is some dispute over the circumstances under which that employment contract was agreed. There is also some dispute about Ms Horlor’s work performance over the duration of her employment. Kensington Park Medical Practice assert that the termination of Ms Horlor’s employment followed its assessment that the practice nurse position was losing money and could not be justified. Ms Horlor disputes the extent to which the termination of her employment was a redundancy situation.

The evidence

[5] Whilst I have taken into account all of the evidence provided to me in this matter, I have briefly summarised the witness evidence in the following terms.

[6] Ms Horlor’s evidence went to the history of her employment with Kensington Park Medical Practice. She asserted that another nurse was engaged to carry out some of her duties within one week of the termination of her employment. Ms Horlor denied that there were performance issues associated with her work or that any such issues were appropriately raised with her.

[7] Ms Inman is the Kensington Park Medical Practice bookkeeper. Her evidence went to the financial position at Kensington Park Medical Practice and the extent to which this was the primary reason for the termination of Ms Horlor’s employment. Ms Inman’s evidence also detailed various concerns about Ms Horlor’s work performance and the extent to which other opportunities were not available within the Kensington Park Medical Practice businesses. Ms Inman confirmed that in late October 2015 a practice nurse was engaged to work at the Salisbury facility from early December 2015 but that this employment decision was made before she, and management of the Kensington Park Medical Practice, became aware of the full extent of the financial predicament confronting that practice.

[8] Ms Gardener is engaged by Kensington Park Medical Practice as a practice nurse at another site. Her evidence went to her limited dealings with Ms Horlor and the extent to which she was consulted, in late 2015, by Dr Symon about the possibility that Ms Horlor could be transferred to that site because her position at the Kensington Park Medical Practice, Kensington site could no longer be funded. Ms Gardener did not support the redeployment proposition and it did not occur.

Findings

[9] Before addressing the various factors set out in s.387 of the FW Act I have recorded the conclusions I have reached about the relevant facts of this matter.

[10] I have concluded that Ms Horlor’s employment was terminated because Kensington Park Medical Practice concluded that the position of practice nurse at the Kensington site was financially unsustainable. My conclusion in this respect is fundamentally based on the evidence provided by Ms Inman and Dr Symon and is particularly supported by the Profit & Loss Statement over the time in question. 3 Additionally, the minutes of staff meetings convened on 19 October 2015 and 6 November 20154 confirm the various steps that were being taken by Kensington Park Medical Practice to identify, and then reduce its levels of expenditure. I have accepted that Kensington Park Medical Practice engaged another practice nurse at the Salisbury site shortly before it reached this conclusion and that the cost of this appointment was taken into account in its assessment of its financial position. Notwithstanding issues relative to Ms Horlor’s performance which may, or may not, have been well managed, it was the financial position confronting Kensington Park Medical Practice that resulted in the termination of Ms Horlor’s employment. In this respect I have concluded that there was a sound, defensible and well-founded reason for the termination of Ms Horlor’s employment.

[11] I am not satisfied that Kensington Park Medical Practice replaced Ms Horlor with another person undertaking those same duties. I am not satisfied that the employee who was engaged prior to the decision to terminate Ms Horlor’s employment, but who had not, at that time, actually commenced employment, as a replacement employee. The employment costs of that person were taken into account in the assessment of the Kensington Park Medical Practice finances and I accept that, as at the time of the decision to terminate Ms Horlor’s employment, there was a contractual obligation to employee that person. It is true that Kensington Park Medical Practice could have elected to make someone other than Ms Horlor redundant but the evidence makes it very clear her dismissal was a redundancy circumstance based on the particular circumstances of her position. The evidence of Ms Inman confirms that there was no replacement employee as such. I have noted that a contractor has been engaged for some three hours a fortnight to undertake some of the work that she previously did. To the extent that various of the duties previously undertaken by Ms Horlor were redistributed to other Kensington Park Medical Practice employees, this does not mean that Ms Horlor’s position was of a continuing nature. It is clear that a person’s position may still be redundant despite various of those functions being undertaken by other employees. 5

[12] In terms of the various concerns Kensington Park Medical Practice had relative to the manner in which Ms Horlor performed her work it is apparent that while these concerns may eventually have given rise to an employment termination, they were not the reasons for the termination of her employment on 6 November 2015. That much is clear from the termination of employment correspondence and the evidence of Ms Inman and Dr Symon.

[13] I am satisfied that the financial difficulties confronting the Kensington Park Medical Practice were explained to employees, including Ms Horlor, in staff meetings held on 19 October 2015 and 6 November 2015. I am not satisfied that Ms Horlor’s assertions with respect to grant funding available to Kensington Park Medical Practice have been made out such that they establish that there was no genuine redundancy situation. I have concluded that, having made the decision to restructure the business and make the position of practice nurse redundant, Kensington Park Medical Practice advised Ms Horlor of its position in this regard at the 6 November 2015 meeting.

[14] I have concluded that, as a relatively small business, Kensington Park Medical Practice had limited capacity to redeploy Ms Horlor into an alternative position but that the evidence of Ms Gardener 6 and Dr Symon confirms that redeployment was investigated.

[15] Section 387 of the FW Act states:

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.”

[16] I have considered each of these factors in the context of all of the evidence before me.

Valid reason (s.387(a))

[17] Notwithstanding subsequent changes to the legislation, I have applied the principles set out in Selvachandran v Peteron Plastics Pty Ltd. 7 I have concluded that the reasons for the termination of Ms Horlor’s employment on 6 November 2015 were not related to her capacity or to her conduct. Those reasons related to the financial position of Kensington Park Medical Practice. As a consequence there was no valid reason for the termination of Ms Horlor’s employment which related to her capacity or conduct. Consistent with the position adopted by the Full Bench in UES (Int’l) I have regarded this factor as a neutral consideration relative to whether the termination of Ms Horlor’s employment was harsh, unjust or unreasonable.

Notification and the opportunity to respond (ss.387(b) and (c))

[18] Ms Horlor was not notified of, or given an opportunity to respond to, any reason for her dismissal which was related to her capacity or her conduct. However, because matters relating to her capacity or conduct must be regarded as neutral considerations, I have also taken these factors to be neutral considerations.

Support person (s.387(d))

[19] Kensington Park Medical Practice did not unreasonably refuse to permit Ms Horlor to have a support person present to assist at the discussions relating to her dismissal. In fact, the advice of the termination of her employment was provided to her in the course of the meeting on 6 November 2015 8 and it appears from the minutes of that meeting that another employee immediately provided support to her. Notwithstanding this, I have concluded that the issue of access to a support person must also be regarded as a neutral matter in considering whether the termination of her employment was harsh, unjust or unreasonable.

Size of the Kensington Park Medical Practice and human resource management (ss.397(f) and (g))

[20] Kensington Park Medical Practice has a relatively small number of employees. It has no dedicated human resource manager. Neither does it have sophisticated policies or procedures to deal with a situation of this nature. I have concluded that the absence of those policies or procedures or human resource management expertise is relevant in as much as I accept that the termination of Ms Horlor’s employment could have been better explained to her and that the process of the termination of her employment may have been better addressed.

Other matters (s.387(h))

[21] I have concluded that Kensington Park Medical Practice’s decision to make Ms Horlor redundant because of its desire to reduce its outgoing expenditure was a sound, defensible and well-founded reason for that dismissal. I have concluded that, given the size of the Kensington Park Medical Practice, there were limited redeployment opportunities which were nevertheless investigated. These factors mitigate in favour of the termination of Ms Horlor’s employment not being regarded as harsh, unjust or unreasonable.

[22] However, just as the Full Bench in UES (Int’l) took into account a failure to consult stipulated in the relevant award provision, I have also taken the failure of the Kensington Park Medical Practice to fully consult consistent with the provisions of the Nurses Award 2010 into account. Whilst that failing was to some extent mitigated by the advice provided to Ms Horlor about the financial position of the Kensington Park Medical Practice, I have also accepted that Ms Horlor was not given advance notice that her employment was in jeopardy.

[23] The evidence before me indicates that Kensington Park Medical Practice or Dr Symon, personally loaned Ms Horlor monies which have not been fully repaid. Whilst I note that this arrangement may conceivably give rise to other litigation, I have not taken it into account in this matter as I am not satisfied that it directly relates to the employment termination issue.

Conclusion regarding harsh, unjust or unreasonable

[24] I have concluded that the failure of Kensington Park Medical Practice to give Ms Horlor advance notice of the extent to which her position was in jeopardy is of such significance that I should regard her dismissal as harsh, unjust or unreasonable notwithstanding that dismissal occurred for a sound and defensible reasons.

Remedy

[25] In these circumstances s.390 of the FW Act provides that a remedy may be awarded. The primary remedy is that of reinstatement. Neither Ms Horlor nor Kensington Park Medical Practice have proposed that reinstatement is appropriate and, accordingly I have considered the extent to which an amount of compensation in lieu of reinstatement should be made. The criteria to be taken into account in setting any such amount are set out in s.392 of the FW Act. In applying these criteria I have again adopted the approach set out in UES(Int’l).

Remuneration that would have been received (s.392 (2)(c))

[26] Had Ms Horlor not been dismissed on 6 November 2015 I have concluded that her employment would have terminated one week later, following the requisite consultations with her. I am not satisfied that those consultations would have changed the outcome in this matter. Accordingly the remuneration she would have received or would have been likely to have received would have been one week’s pay plus any attendant superannuation obligations.

Remuneration earned (s.392(2)(e))

[27] I am not satisfied that Ms Horlor has gained other income from employment since the termination of her employment. In any event, I have concluded that no amount was earned in the week following the termination of her employment.

Income reasonably likely to be earned (s.392(2)(f ))

[28] I do not consider that any deduction should be made for any income likely to be earned pursuant to this factor.

Other matters (s.392(2)(g))

[29] There are no other matters I consider should be taken into account in the determination of an amount of compensation.

Viability (s.392(2)(a))

[30] I have concluded that there is no evidence that an order for one week’s pay plus the superannuation amounts payable to Ms Horlor for that week would affect the viability of the Kensington Park Medical Practice enterprise.

Length of service (s.392(2)(b))

[31] Ms Horlor worked for Kensington Park Medical Practice for some 10 months. Whilst that short period of employment might have formed the basis for a reduction of the amount being contemplated, I have elected not to reduce that amount on this basis.

Mitigation efforts (s.392(2)(d))

[32] I have concluded that the limited information about mitigation efforts on the part of Ms Horlor do not give rise to the need to review the amount being contemplated.

Misconduct (s.392(3))

[33] The termination of Ms Horlor’s employment was not a consequence of misconduct. Accordingly I have not reduced the compensation amount being proposed.

Conclusion

[34] I have concluded that Ms Horlor should be paid an amount of one week’s pay at her normal rate of pay plus any attendant superannuation obligations as compensation for the termination of her employment. An Order (PR580378) to this effect will be issued.

Appearances:

M Horlor on her own behalf.

B Symon for the respondent.

Hearing (Determinative Conference) details:

2016.

Adelaide:

May 17.

 1   [2016] FWC 1522 (22 March 2016)

 2   [2012] FWAFB 5241 (14 August 2012)

 3   Exhibit R1, attachment 1

 4   Exhibit R1, attachment 2

 5   See for example, Dibbs v Commissioner of Taxation (2004) 136 FCR 398 404-405

 6   Exhibit R2

 7 (1995) 62 IR 371

 8   Exhibit R1, attachment 2

Printed by authority of the Commonwealth Government Printer

<Price code C, PR580377>